The War of Words over Biofuels

Research on land use is used as evidence in Europe’s battle over biofuel mandates, but the issue remains unsettled.

Salvos continue in Europe’s contentious debate over the region’s production and use of biofuels. After a series of proposals and counterproposals in 2013, Europe is now left in a situation that IFPRI Senior Research Fellow David Laborde calls “the worst possible.”

Europe currently mandates that 10 percent of transport fuels come from renewable energy. In practice, these renewable fuels consist almost entirely of crop-based biofuels. The problem arises because studies, including several from IFPRI, have shown that first-generation biofuels—made from food crops like wheat or rapeseed—can actually raise net greenhouse gas emissions. Now some countries want to reduce biofuels as a share of transport fuels, while other countries and the biofuel industry are fighting to maintain the status quo.

Dueling Caps

In July 2013, the European Parliament’s Environmental Committee voted to cap the transportation industry’s use of first-generation biofuels at 5.5 percent of transport fuels, following the lead of the European Commission, which in 2012 had proposed a 5 percent cap. Under heavy pressure from the biofuel industry and various member states, however, the European Parliament later raised the proposed cap to 6 percent. Lithuania, which held the EU presidency until January 2014, countered with a cap of 7 percent to be approved by the European Council, the third EU body to participate in the decision.

All of the back-and-forth came to a standstill last December when the European Council met for a vote. Seven member states blocked the proposal, some arguing that the cap was too low, and others saying it was too high. On June 13 the Energy Council reached a political agreement on the draft directive on indirect land use change prepared by the Hellenic presidency (a 7 percent target for conventional biofuels, stronger encouragement for advanced biofuels, reporting on indirect land use change). A final decision, which will need to be supported by the newly elected European Parliament and newly appointed European Commission, may wait until 2015.

Repurposing Land

Environmental concerns about biofuel production stem from evidence on how it can indirectly lead to changes in land use. To expand biofuel production or to replace cropland taken over by biofuel production, farmers sometimes clear forests and other pristine lands. When this change in land use takes place, the carbon stored in soil and accumulated biomass is released, pushing up net greenhouse gas emissions.
Laborde has been heavily involved in assessing the impact of Europe’s biofuels mandate on land use and greenhouse gas emissions, using IFPRI’s MIRAGE-Biof Model. “In a world where carbon is not priced properly, supporting the most efficient biofuels has to be a central component of any biofuel legislation,” he says.

Yet the issue of indirect land use change continues to be a bone of contention. The European Biodiesel Board, an industry lobby group, has dubbed IFPRI’s model “ungrounded science” and called for further research. European Commission officials, however, still consider IFPRI estimates robust, calling them “the best available science” on the issue.

Why is the existing situation so dire? According to Laborde, the current legislative uncertainty gives investors and firms no incentive to come up with innovative ways of converting biomass into liquid energy. At the same time, the status quo benefits the existing first-generation industry, which delivers very low greenhouse gas savings at a high economic cost.

The long-term implications, says Laborde, go beyond biofuels: “Indirect land use changes have potential consequences for the whole biomass-based economy. This raises the question, should we acknowledge the fact that the land used to produce biomass has as an inherent value as a carbon sink?”

Although South Asia has the highest concentration of undernutrition in the world, in the past two decades Bangladesh and Nepal have both achieved striking improvements in the nutrition of their citizens. How did they do it?